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Genachowski: FCC Is Aware of 'Serious' News Corp. Issues in UK

FCC Chairman Julius Genachowski conceded Wednesday that character was one of the qualifications for determining a licensee's fitness for renewal, but would not extrapolate on what, if anything, that meant in terms of Fox TV station license renewals or findings of a British Parliament investigating committee that Rupert Murdoch was not fit to lead a major international company.

That came in a Senate Appropriations Committee Financial Services Subcommittee hearing on the FCC's budget, a hearing that ranged over a variety of topics from online political files to News Corp., to USF reform to the FCC's fine of Google over its Street View Wi-Fi collection.

Genachowski was pressed by Sen. Frank Lautenberg (D-N.J.), a longtime critic of News Corp. and Fox, on whether the FCC was taking that Parliamentary investigation into News Corp. and its finding that the company had misled it to cover up illegal activity into account when it considered the company's fitness to own 27 TV stations.

The chairman said that it was not appropriate for him to comment on specifics of any adjudicatory proceeding that might come before the commission. But he did say that licensees do have to meet certain qualification, technical, financial and on character. He said that the FCC has laid out what that entails, and that "if any issues arise, we would take this very seriously" and would "look at the record, look at the facts, apply the precedent and apply the law."

Lautenberg asked whether that meant that the British Parliament committee finding did not pass the FCC unnoticed.

Genachowski said that the FCC was certainly aware of the "serious issues" raised in the U.K. and the ongoing process there.

Lautenberg also asked why the FCC had not yet decided on the challenge to News Corp.'s license for WWOR Secaucus, and why it was taking so long. The chairman said that staff was still working on it, that there is a "complex history involving the station and its particular obligations to provide service to New Jersey and moves of the station facility." That said, he added that the FCC would come up with a decision "as soon possible."

Lautenberg said this was a decision the FCC "ought to be able to get on with."

The FCC chairman was pressed by Financial Services and General Government subcommittee Chairman Dick Durbin (D-Ill.) on the commission's decision to fine Google, a company worth $111 billion only $25,000, for impeding the Street View investigation, and for its conclusion that collecting unsecured payload info -- emails, text, passwords -- from unencrypted Wi-Fi nets was not illegal. Durbin called the fine "somewhat short of a tap on the wrist," asking whether the FCC did not think what Google had done was "not that serious," adding: "How are you protecting our privacy with a $25,000 fine?"

The chairman said the FCC had been concerned about the collection of Wi-Fi information, which was why it launched the investigation, but encouraged Congress to address the issue of whether such info should be protected.

Genachowski said he agreed it should be, but that FCC lawyers concluded currently it was not. "I do look forward to working with Congress on a way to address this...The law should protect people even if they have unencrypted Wi-Fi."

But Genachowski said he was confident in his general counsel's decision Google it did not violate the law as currently written.

"This was a serious effort run by serious people," he said, "and I have complete confidence in their legal conclusions." He conceded that compared to Google's market cap and revenues the fine was not large, but said it was "consistent with precedent in this areas for companies that act improperly during this process." He also said that the "educational" value for Google, other companies, Congress and consumers, was "an important benefit" of the investigation.

Durbin said he could not believe that encryption was the threshold for protection, asking how a consumer would possibly know that.